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[News]US corn-belt farmers:’The country has turned on us’

There were times when Arlyn Schipper could almost feel heroic on hisfamily farm in the heart of America’s corn belt.

His 1,619 hectares (4,000 acres) in Iowa, planted almost entirely withcorn, were helping to feed a nation – or at least help put fuel in itsgas tanks, as his crop was processed into corn ethanol.

Schipper still sees it that way. It is just he feels America has movedon, or as he put it: “The country has turned on us.”

The US debt crisis, and the challenge of finding $1.3tn (£796bn) inbudget cuts, has forced Congress to re-examine three decades ofgovernment subsidies for corn ethanol.

Drought and famine in the Horn of Africa have exposed further anegative consequence of biofuel production: the global food crisis. Bycompeting with food crops for land, large-scale biofuel production hasconstricted supply and so boosted food prices across the world. Thishas led to a backlash against biofuels such as corn ethanol fromenvironmentalists and development charities.

“Ten years ago this was the greatest thing since apple pie – ethanol.A lot of farmers invested in this, and a lot of farmers invested inethanol plants. Everybody wanted it. Our country wanted it. It was arenewable resource,” said Schipper. “And now that we have got all ofthis money tied up in this, it’s kind of turned on us.”

Many will feel that corn farmers have had it pretty good. And theethanol industry still has a mighty hold on America’s corn belt.America is projected to produce 14bn US gallons (53bn litres) of cornethanol this year at 200 refineries across the midwest.

Iowa, which leads the country in corn production, will use 58% of itscrop for ethanol this year. Some farmers, such as Schipper, may sellup to 70% of their crop to produce ethanol. There are five ethanolplants within a 50-mile radius of his home

But a five-year boom in corn ethanol production may be coming to anend – or at least that is the hope of some campaigners. “I think weare at a turning point. We are full to the gills with corn ethanol,”said Jeremy Martin, who studies biofuels for the Union of ConcernedScientists.

As a start, the industry is due to lose some of its government support– more than 30 years after Jimmy Carter first began subsidising cornethanol to encourage the development of a homegrown plant-based fuel.

Congress is expected to end $6bn in subsidies during the debt dealnegotiations. The subsidy had been directed to the oil firms whichincorporate ethanol into their products. Fuel sold at most US petrolstations contains 10% ethanol.

The industry had hoped to re-direct some of those funds to refittingpetrol stations to take more ethanol, under a deal reached in theSenate last July.

But the subsequent US debt ceiling deal, with its demands for deepcuts, now makes that unlikely. “Washington is out of money,” saidSheila Karpf, an analyst at the Environmental Working Group, anon-profit organisation.

For farmers like Schipper, and ethanol refiners, there will be littlereason to mourn the end of the subsidy, arguing that the money wentdirectly to the oil industry anyway.

But campaign groups estimate it could lead to a slight drop in cornprices. “It won’t make a big difference for American farmers but itcould make a huge difference for impoverished countries,” said MarieBrill, an analyst at ActionAid.

This year’s famine in the Horn of Africa has a complex set of causes,not least a dire political situation that has made problems muchworse, but it has served to refocus attention on global food prices –and the impact of harvesting biofuels such as corn ethanol.

The US is the world’s largest producer and exporter of corn, giving itthe power to dictate global market responses.

Domestic consumption of corn, as ethanol, has driven up the price ofcorn worldwide, according to studies from the World Bank and otherinstitutions.

The high prices for corn – while driving hunger in Africa – haveencouraged other farmers to turn over land from wheat, soybeans, oreven pasture to corn production. US farmers planted 92m acres of cornthis year, up 4m acres from last year, according to the US departmentof agriculture.

“Farmers are tearing up any little bit of land they had and going tocorn,” said Brill.

The concern over the global food crisis added new urgency to existingcampaigns against the use of corn ethanol. Environmental groups hadargued that its use offered no meaningful reduction in greenhouse gasemissions – in part because of the vast use of energy and water in theethanol conversion process.

As a food crop, corn is also far more damaging to the environment thanother crops, such as soybeans, because it uses more pesticides andfertiliser.

“The research is very clear by now. Turning corn into ethanol is notenvironmentally sound,” said Bill Freese of the Centre for FoodSafety. “It’s really an environmental disaster.”

That was not what was intended when Carter promoted the use of ethanolas a way to get America off imported oil, offering subsidies toindustries to mix the fuel. The industry never really took off – evenwith federal funding. By 2001, 6% of corn crop was being used toproduce ethanol.

But energy policies brought in by George W Bush which set productionquota to encourage the use of biofuels allowed the industry to takeoff. By last year, nearly 40% of US corn was going to produce ethanol.

It is less clear, however, whether corn ethanol is having a majoreffect in helping America reduce its consumption of fossil fuels. Cornethanol will displace just 7% of the energy supplied by oil by 2020,according to an analysis by Freese.

Campaigners argue that the entrenched government supports for cornethanol have blocked the development of next generations of greenerbiofuels made from wood or the non-edible parts of plants, known ascellulosic biofuels. “Corn ethanol continues to eat up the market andeven eat up grant money that could be used to spur the development ofcellulosic and advanced biofuels,” said Sheila Karpf, an analyst atthe Environmental Working Group. Getting rid of corn ethanol though isanother matter. For farmers like Schipper, ethanol has broughtstability and new sources of income. Over the years, the refinerieshave spun off another industry in animal feed lots, which buy up theunused parts of the corn kernel to feed to pigs, cattle and turkey.Harris Haywood, who runs a nearby cattle finishing operation,estimates he has cut back on his corn use by 40%, by re-using theproduct from the ethanol refinery.

“The byproduct is very, very cheap compared with corn,” he said. “Andwe can vary our rations to the price of corn. If corn gets cheap wecan use more corn.” It’s going to be hard to persuade farmers awayfrom ethanol.

Despite the increasingly negative public opinion on ethanol Schipperis just not ready to give up on it yet.

“Everything has turned on us, but ethanol is still a great thing,” hesaid. “It’s been good for us.”